BETTOR HANDICAPPING AND MARKET-EFFICIENCY IN GREYHOUND PARIMUTUEL GAMBLING

This paper evaluates the speculative efficiency of the parimutuel gamb ling market for greyhound racing. The efficiency tests consider the in formational content of better handicapping data as well as the forecas ts of professional handicappers and the aggregate market. Previous stu dies have failed to consider the wide range of performance data that a re available for better handicapping activities. Two tests of efficien cy are considered. The first test evaluates the in-sample explanatory power of the handicapper's forecasts and handicapping data relative to the aggregate market's forecasts, as indicated by the final odds. The second test compares simulated rates of return to hypothetical gambli ng obtained from ex ante finish forecasts to the efficient rates of re turn that are dictated by the track's commission. Significant speculat ive inefficiencies are revealed. The second test suggests the existenc e of above-normal returns to gambling from using conditional forecasts generated from better handicapping data.